The Ontario Hay and Forage Co-operative is part way to attracting enough members to build a new double compacting facility to drive exports, but more committed hay producers are needed.
The proposed project is currently planned to handle 100,000 tonnes annually in a 20,000 sq. ft. building with a double compaction press and be located within one hour of Brampton, where all the shipping containers are loaded for export.
Why it matters: The co-operative is working with André Larocque – a board director located in Alexandria, Ont. – to double compact their bales and help with the logistics of shipping, a relationship that is working well but not the most convenient location for farmers to access.
The co-op has 63 members but about 200 are needed to make the enterprise viable.
“The facility can’t be built until there is enough members growing export quality hay to feed the building,” says Fritz Trauttmansdorff, chair of the Ontario Hay and Forage Co-operative board of directors. “Once we have the supply, and the market, we can build the facility.”
Trauttmansdorff has seen more interest in the co-op since its evening meeting in late April. Information meeting attendance has been growing.
Cost of the building will be partially covered by members and the rest financed. The co-operative plans to approach government, as well, and will also consider private partners.
“The idea is to compact the bales enough that when loading 40-foot shipping containers you can max out the shipping weight of the container,” says Trauttmansdorff.
“To be able to get serious about building a facility like this, we need a critical mass of hay available – the press alone is $2-$3 million. It’s a big enterprise by the time you get going. The total cost to get it going is about $15 million, with $10 million in hard costs and $5 million in soft costs – operating capital, staff etc.”
Old idea, but more feasible
The idea for a hay compaction and drying facility was first put forth in the 1980s but various logistics prevented development.
Having access to containers for overseas shipment at a reasonable cost was difficult and getting hay dried to 12 per cent consistently was a gamble.
The widening of the Panama and Suez canals has lowered the co-operative’s expenses for shipping hay and has given new life to the concept.
“It has seriously lowered our prices for shipping into the Asian and Pacific market but also the Middle East market, allowing us to now compete with people on the west coast and other countries because our shipping costs are bearable,” says Trauttmansdorff.
The nine hay driers that are now spread throughout Ontario help to lower the hay moisture and allow for business growth.
“To go to the Middle East and tell them we have 10,000 tonnes of hay available is a gamble without the driers,” says Trauttmansdorff. “Farmers can occasionally, but not all the time, get hay down to 12 per cent (ideal shipping moisture), but it’s important to get it off the field on a consistent basis before it rains again.
“These are the big drivers, the availability of driers and the changes in logistics, these have happened over the last two years and it’s still on going but it opens the doors to get into those markets.”
In Ontario, topsoil and organic matter levels are in decline and adding forages into crop rotations can help to improve soils. The co-operative’s sophisticated program provides farmers an opportunity to grow that forage as a cash crop, says Trauttmansdorff.